Post
Topic
Board Speculation
Re: Effect of negative difficulty change on BTC price
by
raid_n
on 27/11/2014, 15:48:01 UTC
If the total network hashrate is 277 Petahashes and stays constant, won't they produce 3600 coins faster at a difficulty of 39 bln than they would at 40 bln?

The difficulty re-targets after 2016 blocks.
Simply put if the hashrate is higher than anticipated more blocks are found in a shorter time so difficulty increases to compensate for that.
If the hashrate drops it takes longer for the 2016 blocks to be found and difficulty decreases after the next re-target to compensate.

Difficulty adjustment is slow so it can lag behind hashrate changes.

[edit] To clarify. Think in terms of the time it takes to find blocks and not the amount of bitcoins found.
If your hashrate increases you will find blocks faster than anticipated so the 2016 blocks until the re-target are found ahead of schedule.
The protocol will then increase the difficulty so if the hashrate does not increase again the timing should be roughly on target

[edit2] to consistently create blocks faster than anticipated the hashrate has to keep increasing.